I was upgrading my Apple TV with the 250GB Western Digital Scorpio drive and I ran into some problems with the Engadget procedure.

I had the same diskmanagement setuid-tool failure that MonroeMac had, which is what brought me to this page.

The diskutil resizeVolume would indicate that the Media partition was already at the maximum size. So that was out. And attempts to create the partition with diskutil or DiskUtility always borked the partition table.

And MonroeMac's later procedure that involved creating the new partition and doing a factory restore also failed. The Apple TV would fail during factory restore.

I then manually remove the .Spotlight folders on the OSBoot and Media drives (see the Engadget article for details on how to do this).

Then after confirming the tables with gpt show disk1 I ejected the disk, put it in the Apple TV and it started right up. Didn't even need to do a factory restore. I just entered my wireless network password and paired it with iTunes and am currently transferring my media.

228.59GB formatted. Sweet!

I hope this helps someone. It took me quite a few hours and a lot of webpages to get this working.